Physical risks associated with the impacts of climate change and financial portfolios: Carbone 4 is developing a market-wide methodology called C.R.I.S.

Carbone 4 is launching the development of C.R.I.S. – Climate Risk Impact Screening – a tool designed to help financial institutions better identify the physical risks affecting their asset portfolios. This innovative project is led by Carbone 4 and has received initial financial support from major stakeholders (AFD, CDC, FRR, Natixis-Mirova, CDG Capital, ERAFP, EDF).

 The year 2015 highlighted the growing commitment of financial stakeholders to the fight against climate change.

While attention and efforts have focused on greenhouse gas emissions, a new issue is taking center stage: The impacts of climate change on economic activities and adaptation. According to Munich Re, over the past thirty years, the number of extreme events (floods, droughts, etc.) that have resulted in economic losses has more than tripled worldwide. Mark Carney, Governor of the Bank of England and Chairman of the FSB, states that climate change and its impacts are bringing about potential far-reaching implications for insurers, financial stability, and the economy1. Thus, in addition to their commitments to reduce their carbon footprint and raise awareness of carbon risk, financial institutions face risks related to the effects of climate change. They are on the front lines and have a a vital role in initiating the transition to a low-carbon economy that is resilient to climate change.

In France, Article 173 of the Law on Energy Transition for Green Growth requires the relevant investors to disclose their level of exposure their asset portfolios to the consequences of climate change. In this context, and drawing on its extensive experience, Carbone 4 is launching the C.R.I.S. (Climate Risk Impact Screening) collaborative project aimed at analyzing physical risks to financial portfolios. This method will make it possible to assess the exposure of various asset classes to climate-related risks on a global scale.

With this new method, Carbone 4 offers the first comprehensive climate risk analysis service (transition risk and physical risk) designed for investors.1 Mark Carney’s speech on “Breaking the Tragedy of the Horizon.” September 2015.

About Carbone 4

Founded by Alain Grandjean and Jean-Marc Jancovici, Carbone 4 is a consulting firm specializing in energy and climate transition that offers its expertise to public and private sector organizations.

Press Contact

Dorothée Coloby Phone: +33 (0)1 76 21 10 00 dorothee.coloby@carbone4.com